Correlation Between Rongsheng Petrochemical and Jiangxi Selon
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By analyzing existing cross correlation between Rongsheng Petrochemical Co and Jiangxi Selon Industrial, you can compare the effects of market volatilities on Rongsheng Petrochemical and Jiangxi Selon and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rongsheng Petrochemical with a short position of Jiangxi Selon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongsheng Petrochemical and Jiangxi Selon.
Diversification Opportunities for Rongsheng Petrochemical and Jiangxi Selon
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rongsheng and Jiangxi is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Rongsheng Petrochemical Co and Jiangxi Selon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Selon Industrial and Rongsheng Petrochemical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rongsheng Petrochemical Co are associated (or correlated) with Jiangxi Selon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Selon Industrial has no effect on the direction of Rongsheng Petrochemical i.e., Rongsheng Petrochemical and Jiangxi Selon go up and down completely randomly.
Pair Corralation between Rongsheng Petrochemical and Jiangxi Selon
Assuming the 90 days trading horizon Rongsheng Petrochemical Co is expected to under-perform the Jiangxi Selon. But the stock apears to be less risky and, when comparing its historical volatility, Rongsheng Petrochemical Co is 2.12 times less risky than Jiangxi Selon. The stock trades about -0.02 of its potential returns per unit of risk. The Jiangxi Selon Industrial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 883.00 in Jiangxi Selon Industrial on September 12, 2024 and sell it today you would lose (116.00) from holding Jiangxi Selon Industrial or give up 13.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rongsheng Petrochemical Co vs. Jiangxi Selon Industrial
Performance |
| Timeline |
| Rongsheng Petrochemical |
| Jiangxi Selon Industrial |
Rongsheng Petrochemical and Jiangxi Selon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rongsheng Petrochemical and Jiangxi Selon
The main advantage of trading using opposite Rongsheng Petrochemical and Jiangxi Selon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongsheng Petrochemical position performs unexpectedly, Jiangxi Selon can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jiangxi Selon will offset losses from the drop in Jiangxi Selon's long position.| Rongsheng Petrochemical vs. Zijin Mining Group | Rongsheng Petrochemical vs. Wanhua Chemical Group | Rongsheng Petrochemical vs. Baoshan Iron Steel | Rongsheng Petrochemical vs. Hoshine Silicon Ind |
| Jiangxi Selon vs. Zijin Mining Group | Jiangxi Selon vs. Wanhua Chemical Group | Jiangxi Selon vs. Baoshan Iron Steel | Jiangxi Selon vs. Rongsheng Petrochemical Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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